TEXAS LIFE AND HEALTH EXAMS SCRIPT 2025/2026
QUESTIONS AND SOLUTIONS GRADED A+
✔✔investigative consumer report - ✔✔interview friends, associates, neighbors- must be
notified within 3 days report is taking- 5 days to get info to consumer
✔✔fair credit reporting act - ✔✔ensures records are confidential, accurate, relevant,
properly used- allows consumer to contact reporting agency to get info on why they got
declined- cant get info from insurer- fine for violating is $2,500
✔✔standard risk - ✔✔representative of majority of people in the same class- covered at
a standard rate
✔✔substandard risk - ✔✔high risk because health issues- rated up/ pays more money-
must sign statement of good health, amendment, and pay extra premium
✔✔preferred risk - ✔✔healthier lifestyle- pays lower premium than substandard
✔✔STOLI/IOLI - ✔✔taking out policy on a person with intent of selling it to a 3rd party-
violates concept of insurable interest
✔✔consideration - ✔✔something of value each party promises to each other- answers
on the application, promising to pay in event of loss
✔✔legal purpose - ✔✔insurable interest, consent, must be of age, not high or drunk,
mentally competent
✔✔conditional - ✔✔certain conditions must be met by both parties
✔✔unilateral - ✔✔only one of the parties is legally bound
✔✔adhesion - ✔✔take it or leave it
✔✔aleatory - ✔✔unequal amounts are exchanged
✔✔permanent policies - ✔✔coverage up to age 100- cash value = face amount-
guaranteed minimum interest rate 3-4%- takes 3 years to build cash value
✔✔whole life - ✔✔guaranteed minimum interest rate- level or fixed premium
✔✔whole life straight life - ✔✔premiums scheduled up to age 100
✔✔whole life limited pay - ✔✔premiums paid up in a shorter time- builds cash value
faster than a straight life- 20 pay whole life- life paid up to 65- endows at 100
, ✔✔single premium - ✔✔can build cash value immediately
✔✔adjustable life - ✔✔guaranteed minimum interest rate- insured can adjust face
amount, premiums, period of protection- face amount cant be increased w/out proof of
insurability
✔✔universal life - ✔✔interest/ market sensitive product- guaranteed minimum interest
rate- flexible premium- (ART)- cash account- option A: level death benefit, beneficiary
only collects death benefit- option B: increasing death benefit, beneficiary collect death
benefit and cash value
✔✔interest sensitive whole life - ✔✔guaranteed minimum interest rate- level premium
✔✔equity indexed whole life - ✔✔s&p 500- guaranteed minimum interest rate- level
premium- seeks higher returns
✔✔variable life insurance - ✔✔must have securities license, registered with FINRA,
SEC- insured picks sub account- no guarantees of a return- funds kept in separate
account- hedge against inflation- minimum death benefit guaranteed $100k
✔✔term life insurance - ✔✔temporary protection- pure death protection- no cash value
✔✔level term - ✔✔death benefit stays the same throughout the term
✔✔increasing term - ✔✔death benefit increases- ROP rider
✔✔decreasing term - ✔✔death benefit decreases- credit life
✔✔annually renewable term - ✔✔premium goes up every year- based on attained age-
proof of insurability not required each year- lowest premium in the early years
✔✔annuities - ✔✔for liquidation of an estate- no death benefit- owner: person, corp,
trust- annuitant: person only- used mainly for retirement purposes- considered fixed
except for variable
✔✔immediate - ✔✔after 1st month but within first year of purchase
✔✔deferred - ✔✔after 1st year of purchase
✔✔accumulation period - ✔✔pay in period- funding your annuity
✔✔annuitization period - ✔✔pay out period- providing you an income
QUESTIONS AND SOLUTIONS GRADED A+
✔✔investigative consumer report - ✔✔interview friends, associates, neighbors- must be
notified within 3 days report is taking- 5 days to get info to consumer
✔✔fair credit reporting act - ✔✔ensures records are confidential, accurate, relevant,
properly used- allows consumer to contact reporting agency to get info on why they got
declined- cant get info from insurer- fine for violating is $2,500
✔✔standard risk - ✔✔representative of majority of people in the same class- covered at
a standard rate
✔✔substandard risk - ✔✔high risk because health issues- rated up/ pays more money-
must sign statement of good health, amendment, and pay extra premium
✔✔preferred risk - ✔✔healthier lifestyle- pays lower premium than substandard
✔✔STOLI/IOLI - ✔✔taking out policy on a person with intent of selling it to a 3rd party-
violates concept of insurable interest
✔✔consideration - ✔✔something of value each party promises to each other- answers
on the application, promising to pay in event of loss
✔✔legal purpose - ✔✔insurable interest, consent, must be of age, not high or drunk,
mentally competent
✔✔conditional - ✔✔certain conditions must be met by both parties
✔✔unilateral - ✔✔only one of the parties is legally bound
✔✔adhesion - ✔✔take it or leave it
✔✔aleatory - ✔✔unequal amounts are exchanged
✔✔permanent policies - ✔✔coverage up to age 100- cash value = face amount-
guaranteed minimum interest rate 3-4%- takes 3 years to build cash value
✔✔whole life - ✔✔guaranteed minimum interest rate- level or fixed premium
✔✔whole life straight life - ✔✔premiums scheduled up to age 100
✔✔whole life limited pay - ✔✔premiums paid up in a shorter time- builds cash value
faster than a straight life- 20 pay whole life- life paid up to 65- endows at 100
, ✔✔single premium - ✔✔can build cash value immediately
✔✔adjustable life - ✔✔guaranteed minimum interest rate- insured can adjust face
amount, premiums, period of protection- face amount cant be increased w/out proof of
insurability
✔✔universal life - ✔✔interest/ market sensitive product- guaranteed minimum interest
rate- flexible premium- (ART)- cash account- option A: level death benefit, beneficiary
only collects death benefit- option B: increasing death benefit, beneficiary collect death
benefit and cash value
✔✔interest sensitive whole life - ✔✔guaranteed minimum interest rate- level premium
✔✔equity indexed whole life - ✔✔s&p 500- guaranteed minimum interest rate- level
premium- seeks higher returns
✔✔variable life insurance - ✔✔must have securities license, registered with FINRA,
SEC- insured picks sub account- no guarantees of a return- funds kept in separate
account- hedge against inflation- minimum death benefit guaranteed $100k
✔✔term life insurance - ✔✔temporary protection- pure death protection- no cash value
✔✔level term - ✔✔death benefit stays the same throughout the term
✔✔increasing term - ✔✔death benefit increases- ROP rider
✔✔decreasing term - ✔✔death benefit decreases- credit life
✔✔annually renewable term - ✔✔premium goes up every year- based on attained age-
proof of insurability not required each year- lowest premium in the early years
✔✔annuities - ✔✔for liquidation of an estate- no death benefit- owner: person, corp,
trust- annuitant: person only- used mainly for retirement purposes- considered fixed
except for variable
✔✔immediate - ✔✔after 1st month but within first year of purchase
✔✔deferred - ✔✔after 1st year of purchase
✔✔accumulation period - ✔✔pay in period- funding your annuity
✔✔annuitization period - ✔✔pay out period- providing you an income
